Gold prices bounced back in domestic trade on Wednesday, with MCX gold futures climbing above the Rs 1.50 lakh mark and gaining more than silver.
December gold futures were trading at Rs 1,50,130 per 10 grams at 10:39 am, up Rs 1,307 or 0.88% from the previous close of Rs 1,48,823. Silver futures for the same expiry were at Rs 2,26,506 per kg, up Rs 1,056 or 0.47%.
Gold had earlier touched an intraday high of Rs 1,50,439, gaining Rs 1,616 from the previous close.
The recovery comes after gold prices faced pressure in recent sessions from a stronger dollar, a hawkish stance from the US Federal Reserve, expectations of another rate hike in October and rising US Treasury yields.
Gold Price Outlook
Gold is showing some recovery in domestic trade, but analysts remain cautious about the near-term trend. Jigar Trivedi, Senior Research Analyst at IndusInd Securities, attributed the recent weakness in gold to a stronger dollar, a hawkish US Federal Reserve, expectations of another rate hike in October, and higher US Treasury yields.
“The outlook for gold price remains weak overall. However, an intraday pullback is possible,” Trivedi said.
For MCX gold December futures, Trivedi sees support at Rs 1,49,000, while Rs 1,50,500 is the immediate resistance level.
Ponmudi R, CEO of Enrich Money, also expects gold to face resistance within the range of Rs 1,50,000 to Rs 1,50,700, followed by Rs 1,52,000 to Rs 1,52,600. On the downside, he sees support at Rs 1,48,000 to Rs 1,47,300 and then Rs 1,46,000 to Rs 1,45,300.
The technical setup also shows some signs of improvement as the RSI is recovering at 44, while the MACD histogram is narrowing in negative territory, indicating that the recent selling momentum could be moderating.
Ponmudi also highlighted gold's relative strength against silver, both on MCX and in international markets. He said the divergence is broadly in line with the global trend rather than being driven by a domestic-specific factor.
What Should Be The Strategy?
For short-term traders, Trivedi sees an opportunity for an intraday recovery, with a target of Rs 1,50,500 to Rs 1,50,800, provided the Rs 1,49,000 support holds.
Ponmudi, however, is looking for confirmation before turning more positive on the rebound. “A sustained move above Rs 1,50,000 is needed to strengthen the rebound,” he said.
He also sees the next important level on the upside to be at Rs 1,50,700, beyond which gold could move towards the Rs 1,52,000 to Rs 1,52,600 level. On the downside, a break below Rs 1,48,000 could bring Rs 1,46,000 into focus.
With the broader trend still cautious, the immediate trading setup therefore hinges on whether gold can hold its key support levels and sustain the move above the Rs 1.50 lakh mark.
Also Read: Gold's Record Rally, High Taxes Fuel India's Under-The-Counter Cash Market
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